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How Should A Non-compete Define Competitors?

On Behalf of | Oct 2, 2022 | Blog, Employment Contracts

If your workplace wants you to sign a non-compete agreement, you need to know how the non-compete will restrict you in the event your employer fires you or you leave of your own accord. One way a non-compete limits your work prospects is by describing the competitors of your employer.

The idea of a non-compete is that it forbids you from competing with your employer for a period of time. This means you cannot take a job with a competing business. However, a poorly drafted non-compete might needlessly restrict your freedom. Business News Daily explains the different ways a non-compete could define the employer’s competition.

Name Specific Companies

Your non-compete may list the names of businesses that are competitors. This could be helpful since you know which companies not to work for. However, a non-compete that only lists specific competitors does not account for new competing businesses that emerge in the period since you signed your agreement. This could cause uncertainty and possible legal conflict.

Define Business Types

A good non-compete agreement must describe the kinds of businesses and industries that you cannot work for. Basically, your non-compete should contain catch-all language that could apply to any business of a specific type or industry. This should clear up what qualifies as competition even if the non-compete names specific competitors but not all of them.

Define Geographic Limitations

Your non-compete should also describe the geographic location where you cannot compete with your employer. While you may not work in a certain industry within a particular radius of your old workplace, the agreement could be unfair if it stops you from working in that same industry in another city or state.

Remember that Colorado law restricts the use of non-competes. If you suspect your non-compete will unfairly cost you work, you might explore possible legal options.